Stimulus spent, retailers face tough rest of year

With the bulk of some $100 billion in tax rebates now deposited in American consumers' bank accounts, the hoped-for boost in spending has proved disappointing for the nation’s retailers. As chain stores reported July sales figures on Thursday, there are signs cash-strapped households may cut back even further in the second half of the year.

When the economic stimulus package was enacted in February, analysts debated just how much of the money would translate into new spending. Now that most of the money has been distributed, it appears that much of it went to pay down credit card bills or beef up savings accounts.

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Those pressures may explain why the $100 billion worth of tax rebate checks didn’t give retailers a bigger lift in July. Some 28 percent of consumers surveyed in July by market researcher TNS Retail Forward said they used the money to pay off credit cards; 27 percent said they used it to pay for everyday expenses like groceries and gasoline, and 20 percent said they put the check into a savings account. Only 11 percent said they used the rebate for discretionary purchases like a new TV or a vacation.

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Now, with those rebate checks spent, retailers are warily looking toward sluggish sales through the rest of the year. Back-to-school shopping is already off to a slow start, especially for new clothes.

link:
http://www.msnbc.msn.com/id/26074524

Sure hope it continues. The bills never end.

I am seeing downturns in the grocery biz (where I am employed) where I am at.

with eating out going down. "Interesting times" as the ancient Chinese curse goes...

And many of the vendors are cutting back routes, deliveries, etc to save on transportation and labor costs. People are shopping down from National brands to store brands and just shopping the weekly ad or just picking up essentials. Coupon use is up (although it seems that coupons are fewer). Folks are trying to stretch their dollars to compensate for both the rising price of fuel, but also the dramatically increased price of groceries. People have to eat, certainly, but they don't have to eat as well as they did.

What business is that? I work at a pedi clinic and business is down a bit.

Oh, and FYI, I have a cat hospital.

I hope your business keeps going well, too

accordng to George Bush. Business is booming. War and killing people is good for business.

They might as well have just electronically transferred 100B directly to the oil companies & saved the trouble..

it just went straight to bills, like all the rest of my money.

:(